This morning on a 5-4 vote the Supreme Court upheld the use of a disparate impact test in a fair housing case. Justice Kennedy wrote the opinion, joined by the Court’s four liberals and over four dissenting Justices.
A parallel issue arises under the effects test of Section 2 of the Voting Rights Act. What does one have to show in the vote denial cases, such as when voter id laws have a disparate impact on racial minorities? Statistical disparities are not enough in the housing context, but looking at them is ok provided there is proof of causality:
But disparate-impact liability has always been properly limited in key respects that avoid the serious constitutional questions that might arise under the FHA, for instance, if such liability were imposed based solely on a showing of a statistical disparity. Disparate-impact liability mandates the “removal of artificial, arbitrary, and unnecessary barriers,” not the displacement of valid governmental policies. Griggs, supra, at 431. The FHA is not an instrument to force housing authorities to reorder theirpriorities. Rather, the FHA aims to ensure that those priorities can be achieved without arbitrarily creatingdiscriminatory effects or perpetuating segregation.
Unlike the heartland of disparate-impact suits targetingartificial barriers to housing, the underlying dispute in this case involves a novel theory of liability. See Seicsh-naydre, Is Disparate Impact Having Any Impact? An Appellate Analysis of Forty Years of Disparate ImpactClaims Under the Fair Housing Act, 63 Am. U. L. Rev.357, 360–363 (2013) (noting the rarity of this type of claim). This case, on remand, may be seen simply as anattempt to second-guess which of two reasonable approaches a housing authority should follow in the soundexercise of its discretion in allocating tax credits for low-income housing.
An important and appropriate means of ensuring that disparate-impact liability is properly limited is to givehousing authorities and private developers leeway to state and explain the valid interest served by their policies.This step of the analysis is analogous to the business necessity standard under Title VII and provides a defense against disparate-impact liability. See 78 Fed. Reg. 11470 (explaining that HUD did not use the phrase “business necessity” because that “phrase may not be easily understood to cover the full scope of practices covered by the Fair Housing Act, which applies to individuals, busi-nesses, nonprofit organizations, and public entities”). As the Court explained in Ricci, an entity “could be liable for disparate-impact discrimination only if the [challenged practices] were not job related and consistent with business necessity.” 557 U. S., at 587. Just as an employer may maintain a workplace requirement that causes adisparate impact if that requirement is a “reasonable measure[ment] of job performance,” Griggs, supra, at 436, so too must housing authorities and private developers be allowed to maintain a policy if they can prove it is necessary to achieve a valid interest. To be sure, the Title VII framework may not transfer exactly to the fair-housing context, but the comparison suffices for present purposes…
In a similar vein, a disparate-impact claim that relies on a statistical disparity must fail if the plaintiff cannot point to a defendant’s policy or policies causing that disparity. A robust causality requirement ensures that “[r]acialimbalance . . . does not, without more, establish a primafacie case of disparate impact” and thus protects defendants from being held liable for racial disparities they did not create. Wards Cove Packing Co. v. Atonio, 490 U. S. 642, 653 (1989), superseded by statute on other grounds,42 U. S. C. §2000e–2(k). Without adequate safeguards atthe prima facie stage, disparate-impact liability mightcause race to be used and considered in a pervasive way and “would almost inexorably lead” governmental orprivate entities to use “numerical quotas,” and seriousconstitutional questions then could arise. 490 U. S., at 653.
I expect lower courts will look at this language in the Section 2 vote denial cases.